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McDonald Comparative Analysis

3.
Introduction:
 The company we have selected is
world one of the largest fast food
Restaurants famously known as
“MACDONALD”.
 Company is very large that it serving
almost 70 millions customers daily and
that’s not all its braches are exceeded
in almost 119 countries.
 The company Headquarter is located
in United States and started in 1940 as
a barbecue restaurant operated by
Richard and Maurice McDonald.

4.
 McDonald’s Pakistan is part of the Lakson Group of
Companies, a leading business house in Pakistan.
 McDonald’s first restaurant opened its door to the people of
Pakistan in September 1998 in Lahore. This launch was met
with unprecedented enthusiasm from the citizens of Lahore,
who are known for their liveliness, vigor and penchant for
quality food. Karachi opened its first restaurant a week after
Lahore.
 Ever since we opened the doors of our restaurants both in
Karachi & Lahore, we have been proud to provide our
customers the same great taste, outstanding value and
superior service that is synonymous with the Golden Arches all
over the world.
 There are now 27 restaurants in 8 major cities of Pakistan. (11
in Karachi, 1 in Hyderabad, 10 in Lahore and 1 in Faisalabad, 1
in Kala Shah Kaku, 1 in Sialkot, 1 in Islamabad & 1 in
Rawalpindi)
Introduction:

5.
Vision
To be the best and leading fast food
provider around the globe
Mission
McDonald's brand mission is to be our customers' favorite
place and way to eat, and improve our operations to
provide the most delicious fast food that meet
our customers' expectations.

6.
Restaurant Ownership
We view ourselves primarily as a franchisor and
believe franchising is important to delivering great
customer experiences and driving profitability. At
year end 2010, 80% of McDonald’s restaurants
were franchised. Of the total McDonald’s
restaurants worldwide:
• Nearly 59% are conventional franchisees
• 21% are licensed to foreign affiliates or
developmental licensees
• Nearly 20% are Company-operated

8.
SWOT Analysis :
Strengths
• Largest fast food market share in the world:
McDonald’s is the largest fast food restaurant chain in
terms of total world sales (8%). It is the second largest outlet
operator with more than 34,000 outlets, serving 69 million
consumers every day in 119 countries.
• Brand recognition valued at $40 million:
Company’s brand is the most recognized brand in fast
food industry and is valued at $40 billion. McDonald’s is also
famous by the Ronald McDonald clown.
• $2 billion advertising budget:
McDonald’s spends on advertising more than any
other food company.

9.
• Locally adapted food menus
The fast food chain is operating in many diverse
cultures where tastes in food are extremely different than
those of US or European consumers. Thus ability to adapt to
local tastes is one of McDonald’s strengths.
• Partnership with best brands:
McDonald’s offers only most popular brands in its
restaurants, such as: Coca Cola, ketchup and others.
• More than 80% of restaurants are owned by
independent franchisees:
Therefore, McDonald’s can focus more on perfecting
its serving system and marketing campaigns.
• Children targeting
The business successfully targets very young children
through offering playgrounds, toys with its meals and
advertisements.

10.
Weaknesses
• Negative publicity:
McDonald’s is heavily criticized for offering unhealthy food to its
customers, stimulating obesity and strong marketing focus on very
young children.
• Unhealthy food menu:
Although McDonald’s tries to introduce healthier choices in its
menu, the menu is largely formed of unhealthy meals and drinks.
Such menu offering prompts protests by organizations that fight
obesity and hence, decreases McDonald’s popularity.
• Mac Job and high employee turnover
Mac Job is a low paid and a low skilled job, which is often seen
negatively by its employees. This results in lower performance and
high employee turnover, which increases training costs and add to
overall costs of McDonald’s.
• Low differentiation:
McDonald’s is no longer able to substantially differentiate itself
from other fast food chains and opts to compete by price rather
than by additional features.

11.
Opportunities
• Increasing demand for healthier food:
While demand for healthier food increases, McDonald’s could introduce more
healthy food choices in its menu and reverse its weakness into strength.
McDonald’s is trying to seize such an opportunity and soon plans to open only
vegetarian restaurant in India.
• Home meal delivery:
McDonald’s could exploit an opportunity of delivering food to home and
increase its reach to customers.
• Full adaptation of its new practices:
McDonald’s has redesigned its logo and restaurant design in 2006. In
addition, it has introduced some new practices. In a result, remodeled
restaurants have seen 8-9% higher than average market growth. McDonald’s
should finish remodeling all of the restaurants and adapt the best practices in
them as soon as possible.
• Changing customer habits and new customer groups
Changing customer habits represent new needs that must be met by
businesses. So far, the company has been successful in introducing its
McCafé, McExpress and McStop restaurants to meet the changing customer
habits and the needs of previously untapped customer groups.

12.
Threats
• Saturated fast food markets in the developed
economies:
The fast food market in the developed countries is already
overcrowded by so many fast food restaurant chains and this
already proves to be a threat to McDonald’s as it barely grew
through 2012.
• Trend towards healthy eating:
Due to government and various organizations attempts to
fight obesity, people are becoming more conscious of eating
healthy food rather than what McDonald’s has to offer in its
menu.
• Local fast food restaurant chains:
Local fast food restaurants can often offer a more local
approach to serving food and menu that exactly represents
local tastes. Although McDonald’s does a great job in adapting
its own menu to local tastes, the rising number of local fast
food chains and their lower meal prices is a threat to
McDonald’s.

13.
• Currency fluctuations:
– The business receives a part of its income from foreign
operations. The profits that are sent back to US have
to be converted into dollars and may be affected by
the exchange rates, especially when the dollar is
appreciating against other currencies. In
2012, McDonald’s profit was largely affected by
appreciating dollar.
• Lawsuits against McDonald’s:
– McDonald’s has already been sued for many times and
lost quite a few lawsuits. Lawsuits are expensive as
they require time and money. And as McDonald’s
continues to operate more or less the same way, there
is high probability for more expensive lawsuits to
come.

14.
• Global Strategies:
McDonald’s Vision is to be the world best
restaurants according to quality and their
services which make their customers happy.
Following are some strategies which
McDonalds are following.
• Franchise Model:
As per franchise model of McDonalds only 15% of total
world restaurants are owned by company the rest 85% are
operated by franchise.

15.
• Advertisement
There are many McDonalds advertisement
method and they are using like different
slogans which is attracting their clients. The
best thing is that they never used comparison
ads or you can negative ads of their
competitors. They are using 140 slogans in
whole world and out of this 23 is used in USA.
• Indian Market
As we know that Indian mostly prefers
vegetarian food as compared to beef
and other food. So company is
thinking or you can say acting
according to it. Their lifestyle and way
of livening is totally different. So,

16.
• Worldwide Growth:
There are two things on which McDonalds focus most.
Adding New Restaurants
Maximize sells and profit their.
And they are doing it by better operation, innovation
and product development.
• Target Segments
McDonalds are targeting 3 classes mostly. But they are
not limited to that yet; there are some special offers
and promos for them.
 Children
 A business Customer
 Teenager

17.
• Co-Branding Strategy:
Co-branding strategy is also one of the beneficial instruments
for boosting the business and providing different the same
things in different manners. In fact co-branding means having a
tie ups with another firm and serving the customer with both
the products. It helps in making profit for both the business
enterprise as well as the increase their sales and growth of
organization.
There are different types of co-branding strategy is used by
McDonalds.
• COCA-COLA
Coke is one of the soft drink brand that has joined the hand of
McDonalds since last few years. Company knows that they are at
their best position and they still can increase by adding one more
product in their service which is already used by millions of
customers.

18.
• Walt Disney
One of the famous places for children’s where they can enjoy
lots of things. Walt Disney joined the hands of McDonalds
specially for the purpose of selling “HAPPY MEAL” in which
kids can enjoy different toys.
• Opening outlets in Petrol Pumps
One of the best strategies they are following that they
are opening large amount of outlets in petrol pumps.
And this strategy they are following mostly in India that
because they know about their population and demand
of particular areas.

19.
Current Best Marketing
Strategy:
In McDonald’s there is a strategy named “Plan to Win” since
2003. This plan to win in the industry exist till now and it forced
McDonald’s to have 32 months of global comparative positive
sales which is the longest strip for the last 25 years. To say more,
company has had a growth which in general lies above the
industry average growth.
“Plan to Win”? It is nothing else except 5P’s that are behind the
Plan to Win, it includes: People, Place, Product, Price, and
Promotion.
The 5P’s are trying to perceive every thinkable angle of the
company, and have ways to improve everything, from
refurbishing old shops, to maintenance Wi-Fi for customers,
setting the right mood with music and creating deli menus to
cope with the bad publicity.

21.
Critical Analysis of Company:
No doubt that company is one of the leading fast food industries.
But, there are some competitors that are eating their shares.
Famous companies like Pizza Hut, Dominos and KFC are at the top
of the list. They are not only serving best food to their customer
but they are also delivering product fast to consumer. The thing is
now days most of the companies are focusing on satisfying the
customer and not concentrated in the time which is affecting the
company in different manner.
The main things in which they have to compete with each other is
following.
 Minimizing the Cost
 Speed
 Healthy Food
• Competitors

22.
• Political factors
The international operations of McDonald’s are extreme under
influence of a policy of the separate state put into practice by each
government. For example, there are certain groups in Europe and the
United States which demand the acts of governmental power
concerning medical values of meal of fast food.
• Threat of new entrants
The threat of new entrants in the fast food industry is high because
there are no legal barriers which would keep them from entering the
industry.
• Economy:
Economy is important factor which is impacting McDonalds.
Company always need to thing about profitability, growth, to expand
of company. So, they need to consider countries
demand, supply, production, distribution, exchange rate, business
cycles, and differential economic growth rates around the world

23.
• Environmental factors:
McDonald's is growing day by day by increasing the number of
restaurant. The main source of ingredient and packaging is nature.
McDonald's has a Rain Forest Policy, which declares its commitment to
beef purchasing practices that do not contribute to tropical de-
forestation. Everyday McDonalds using a huge amount of napkins,
carryout bag, tray lines, clamshells. Oil and water is other major
ingredient using in McDonalds. . The continuous and enormous use of
natural resources can disturb the balance in the ecosystem. In Europe,
McDonald's has been recycling vegetable grease by converting it to
fuel for their diesel trucks Now, every body are conscious about
environment. So, McDonalds need to careful about environment that,
what McDonalds are doing that's environmental friendly.
• Culture and religion:
McDonalds is doing business worldwide. So, different regions
customers got different culture and religion. McDonalds need to think
about, cultural and religion rules and tradition. For example, in India,
the non-vegetarian menu includes chicken and fish items only. Beef is
not on the menu in India because are considered sacred. Like that, in
Muslim McDonald's introduced halal meat for burger.

24.
• Management Practice
Following are some management practices which
they are following.
• (JIT) system of inventory management
JIT, as the name suggests, is the system of supplying products to
customers as soon as they have ordered for it, with minimal delay
between placing the order and getting it in hand. McDonalds
doesn’t begin to cook or assemble or preheat their stuff until they
receive a customer order
• Employees
• Work at time, are neatly dressed and are clean.
• Often make sure that their customer receive safe
food
• Following standard operation procedure.

25.
• Food
• Proper maintain of food
• Proper cocked
• Restaurants
• Should be clean and fast delivering services available.
• Manager Role
• The most important thing that leads to McDonald's success is
managers willing to do what it takes to follow procedures and
implement policies that ensure employees follow
procedures, not to mention riding crew and other managers'
asses in regards to training those procedures and following
up with them on the procedures, all the time!

26.
Suggestions
• As we know that McDonalds is best fast food
company out here but still they need to improve
some specific areas.
• They should open online order form. This will
surely increase more profit?
• Contact with supplier directly so they know that
product which is transferred by them is good like
quality wise etc.
• They should also focus on customer services.
• Dealing with Healthy Food and Quality Product

27.
Conclusion
McDonald’s faces some difficult challenges. Key to its
future success will be maintaining its core strengths.
They still need to improve some areas on the basis of
which they can even become more successful. The most
important thing is that they need to focus more on their
competitors and upcoming market fast food companies
that because they are big threats for the company.
Otherwise their will lots of issue they will have to face.